This site may earn affiliate commissions from the links on this folio. Terms of utilise.

Uber, the San Francisco ride-sharing company, has been in the news of late over its game of chicken with the city of San Francisco over a $150 license fee for self-driving vehicles (which it lost) and for losing an estimated $3 billion dollars in 2022. Now the company has been fined $xx million by the FTC for its predatory lending practices and its exaggerated claims virtually driver pay.

"Many consumers sign up to bulldoze for Uber, but they shouldn't be taken for a ride about their earnings potential or the cost of financing a car through Uber," said Jessica Rich, Managing director of the FTC'due south Bureau of Consumer Protection. "This settlement volition put millions of dollars back in Uber drivers' pockets."

The FTC fined the company for several specific practices related to its business. First, Uber greatly exaggerated the income its drivers were likely to earn. From at least May 2022 until August 2022, Uber's site featured a letter from the CEO, which claimed that the median income of an UberX driver was more than than $90,000 in New York City and more than than $74,000 in San Francisco. These claims were widely disseminated. The FTC'south investigation constitute that the median income of an UberX driver in New York Metropolis was $61,000, while San Francisco drivers earned a median income of $53,000. Less than ten% of Uber drivers earn the income that the company claimed.

The FTC too found that Uber inflated its dollar-per-60 minutes claims when advertising in specific metro areas. The advertised rates ranged from $16/hour to $29/hour and Uber claimed you lot could make these incomes while working part-time or flex fourth dimension. The following chart shows the per-hour income charge per unit that Uber advertised, followed by the percentage of Uber drivers that actually earned that rate in a given metro area.

UberFares

Declaring that your company offers flexible and office-time hours doesn't obviate the legal requirement to fairly represent the boilerplate income a person performing a job typically earns. The FTC plant that fewer than thirty% of Uber drivers earned the median charge per unit Uber promised in 17 separate metro areas.

Side by side, at that place's the financing issue. Uber sets specific requirements for the make and model year of a driver's vehicle, though these vary by country and location. In society to help more than prospective drivers qualify, Uber offers financing to assist would-be drivers pay for vehicles and has made arrangements to provide financing via three subprime auto companies. Despite widely advertising this service as offering the best possible deal on vehicle financing. The company'south ad represented that vehicles could be purchased with payments as low every bit $140 per week or leased for as little as $119 per week. Uber also represented that it "connects drivers with any kind of credit history to the all-time financing options available." Finally, the company's marketing fabric also claimed that drivers who leased vehicles through Uber'south program have unlimited miles and no restrictions on total distance driven.

The FTC'southward investigation institute that "Uber has not had any basis for making these claims. Uber has not collected, received, or monitored whatsoever Commuter-specific data regarding the terms of its Vehicle Solutions Plan. Indeed, when Drivers take complained to Uber about the Plan, Uber repeatedly has responded with the following or a substantially similar note: Please contact your lender to talk over your payments, accruals, or amounts owed[,] every bit Uber does not go on track of this information. The lender indicates your weekly payment and nosotros assist the lender in deducting that payment."

Uber

Furthermore, despite Uber's claims to the contrary, the financing options the company offers take been decidedly sub-par. The median weekly payment for vehicles leased under Uber'south program is well over $200, while leasers take paid an boilerplate of $160. Uber was aware of this, and its communications with the auto lenders it cooperated with reflected the fact that the terms of loans and leases were very dissimilar from what Uber promised its employees "drivers".

Furthermore, Uber's marketing material provided to the automotive industry best-selling that its program was a "One size fits all" policy with an unsaid April of 19.5%, significantly higher than the average lending charge per unit automotive dealers extended to other individuals with deep subprime credit. These lies weren't limited to borrowers with poor credit, numerous drivers who purchased vehicles through Uber got hit with interest rates that were more than double the industry average for other individuals with similar credit scores and histories.

Finally, Uber misrepresented the mileage situation. Despite telling drivers that they could drive an unlimited corporeality, drivers who ended their leases early, for whatever reason (including Uber's own falsification of payment rates and income) were told their leases had an almanac limit of 37,500 – xl,000 miles. Drivers who drove over this amount and attempted to exit the lease were obligated to pay an excess mileage charge of 20 cents per mile. The boilerplate taxi driver in New York City drives 70,000 miles per year. So if you leased a vehicle through Uber, started working full-fourth dimension, and realized a year later that you'd been scammed, yous'd owe $six,000 for the privilege of quitting a job you were offered in profound bad faith.

Uber

Uber has received a great deal of positive coverage from the printing since it launched, but there are signs that the honeymoon is cartoon to a close. The visitor has fought against beingness required to care for its drivers like employees, despite, well, treating them exactly similar employees. It proudly wears its credentials as a "disruptor" of the traditional transportation market, but let's be honest for a moment — the only reason Uber still exists is considering it's backed past Silicon Valley venture capitalists with extremely deep pockets. The company isn't "disrupting" transportation with a more-efficient product; it's merely enjoying billions of dollars in subsidies. Its low prices are a reflection of that, non a paean to the astonishing capability of an app to reinvent on-telephone call transportation.

For all Uber's claims about loving its drivers, it didn't love them enough to be remotely honest with them, to seek out good financing offers on their behalf, or to protect their rights when it negotiated lease contracts. Meanwhile, it's working on a self-driving automobile fleet it hopes will kill any need for human being drivers at all. The $20 meg fine the FTC collected will be used to reimburse drivers who were defrauded by their employer.